CLICK HERE to watch BCREA Chief Economist Brendon Ogmundson discuss the February 2020 statistics
Download the full report by BCREA's Economics Market Intelligence: Sketching Out the Potential Impact of COVID-19 on the BC Housing Market March 17, 2020. Click HERE
Overall Summary Findings:
- While it's unknown how the unfolding COVID-19 outbreak will impact the economy in the long-term, BC is facing a sudden stop in economic activity with little guidance to when things may return to normal.
- Based on our scenario analysis, BC home sales and prices will likely face declines in the spring and early summer but should recover along with the wider economy in the second half of the year, contingent on the outbreak resolving.
- The postponed change to the mortgage stress test rate, originally slated for April 6, 2020, will mute the impact of falling interest rates for the BC housing market.
Whistler discussion with Brendon Ogmundson.
(Brian Ogmundson)"The change to the stress test for insured mortgages was expected to be followed by a change for B20 rules for uninsured mortgages as well (that is everyone, including those with a 20% downpayment, were going to undergo a similar stress test without the purchase price limit). As our analysis included all BC Housing markets (all price ranges) we grouped the insured and uninsured information together.
I think you are right that the impact may be less for the $1M price and over markets. There will be many buyers who can easily qualify at the higher posted rate and who will jump at the chance to get a historically low mortgage rate (which we expect will be around for the rest of the year at least). But it may take some time before the uncertainty of the current moment passes. Our most likely scenario is for the economy to be very slow over the next few months but then rebound due to pent-up demand. That’s why in most scenarios, we anticipate a stronger second half of the year."
thank you to Brian Ogmundson & the BCREA Economists
(Information is discussion only and all buyers and sellers should seek independent legal advice) E&OE
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